Jul 21, 2020

Axios China

Happy Tuesday, and welcome back to Axios China. Today, we've got potential visa restrictions, Xinjiang shirt factories, Mark Esper on the South China Sea, and a lot more.

  • Mark your calendars! Axios on HBO returns on Aug. 3.
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⚡️ Situational awareness: The Department of Justice has just indicted two Chinese hackers for targeting companies working on COVID-19 vaccine research. Go deeper.

This newsletter is 1,566 words, a 6-minute read.

1 big thing: CCP membership has long been an obstacle to immigration

Illustration: Annelise Capossela/Axios

Chinese Communist Party members and their families may face new restrictions on traveling to the U.S. that would be a dramatic expansion of current limits.

Why it matters: U.S. law, on paper at least, has long prohibited CCP members from immigrating, but the proposed policy could gut people-to-people ties between the two countries and mark a near-break in diplomatic relations.

Driving the news: The Trump administration is considering banning CCP members and their families from entering the U.S., according to a New York Times report.

  • The proposed policy would apply to both immigrant and nonimmigrant visas, such as tourist, study and work visas.
  • It would invoke the same provision in the Immigration and Nationality Act as President Trump's 2017 travel ban on people from several Muslim-majority countries.
  • It could apply to as many as 270 million Chinese people, according to an administration estimate.

But such a broad measure is raft with problems.

  • It doesn't take into account the fact that party membership in a one-party state is a structural part of life for many people that is often necessary to have a successful career. It's also a primary way to participate in community organizing.
  • Membership can even provide some political protection for people who want to push the boundaries.
  • Party membership usually isn't publicly disclosed, especially among the rank and file, making it difficult for U.S. consular and border officials to check the veracity of some applications.
  • Yes, but: Party membership would likely be identifiable in enough situations to have a major deterrent effect on party members attempting to visit the U.S.

What they're saying: Analysts have widely criticized the proposal as discriminatory, needlessly broad and harmful.

  • Such a move would more or less augur “an end of the [U.S.-China] bilateral relationship,” Richard McGregor, a senior fellow at the Lowy Institute in Sydney, told the South China Morning Post.
  • It could damage people-to-people exchanges, gut academic programs, hinder business deals and separate Chinese families, as well as make face-to-face meetings between top U.S. and Chinese officials fraught with logistical difficulties.

Background: U.S. immigration law contains a decades-old provision making anyone affiliated with a communist party ineligible for a green card or citizenship.

  • But in practice, "very few people get excluded on the basis of party membership," Gary Chodorow, a U.S. immigration attorney in Beijing, told Axios.
  • That's due to a variety of factors, including light enforcement, waivers and because the immigrant visa form only asks about current, not past, membership.

Beijing has dealt with this restriction for decades. The Chinese Communist Party has a set procedure that allows members to apply to have their party membership canceled in advance of temporary travel abroad.

  • The process allows party members to remain in good standing so that they can rejoin the party after they return.
  • Party members often aren't able to fulfill membership requirements while abroad, such as participating in meetings and paying dues, so this procedure gives members the ability to go abroad without facing disciplinary action for allowing their membership to lapse.
  • But the procedure also benefits party members who are traveling to countries where membership could cause them problems.

The big picture: The Trump administration has already placed numerous travel restrictions on Chinese people from a variety of groups and backgrounds.

The bottom line: As U.S-China rivalry heats up, it's getting harder and harder for citizens of both countries to travel between the two, threatening the economic, educational, cultural and family ties that have formed the foundation of the bilateral relationship for decades.

2. Subsidiary of world's largest shirtmaker put on U.S. blacklist over Xinjiang ties

Illustration: Annelise Capossela/Axios

The U.S. Commerce Department announced on July 20 that it had added a subsidiary of one of the world's largest contract shirtmakers and 10 other companies to an export blacklist over their supply chain ties to Xinjiang, where Muslim ethnic minorities are pushed into a forced labor factory system.

Why it matters: The Trump administration is showing increasing resolve to try to delink U.S. companies from tainted supply chains in China.

Details: Hong Kong-based Changji Esquel Textile Co. Ltd, one of the companies placed on the U.S. entities list, is headquartered in Urumqi and is owned by Esquel Group.

  • Esquel Group's supply chain was first linked to Xinjiang in a May 2019 Wall Street Journal report.
  • Esquel has counted Calvin Klein, Tommy Hilfiger and Nike among its customers.
  • The federal entities list prohibits U.S. companies from exporting products to entities on the list. U.S. law forbids the import of products made through forced labor.

What they're saying: "Esquel does not use forced labor, and we never will use forced labor. We absolutely and categorically oppose forced labor. It is abhorrent and completely antithetical to Esquel’s principles and business practices," wrote Esquel CEO John Cheh in a July 20 letter to Commerce Secretary Wilbur Ross, viewed by Axios.

Esquel has recently hired public relations firms to help plead its case among U.S. lawmakers and in the media.

  • In FARA filings from March, public relations firm TrailRunner International disclosed that Esquel has received subsidies from the Chinese government for "promotion of economic development especially in remote areas."
  • Esquel's dependency on the Chinese government is suggested in the filings, in which TrailRunner International advised Cheh that "as you conduct aggressive outreach to ensure the truth is known, we recommend you stay close to Beijing to ensure they don’t see you as attacking them on this issue."
  • Esquel also hired Akin, Gump, Strauss, Hauer & Feld on July 7.

Esquel has long-standing ties to the Xinjiang Production and Construction Corps (XPCC), a quasi-military governmental organization that dominates the agriculture and energy industries in Xinjiang.

  • The XPCC Public Security Bureau was added to the U.S. entities list in October 2019 due to its role in running some mass internment camps.
  • Esquel's managing director of cotton procurement and operations simultaneously served as the director the XPCC Cotton Association.

Read the full story.

3. Defense Secretary Mark Esper says U.S. opposes China's "maritime empire"

U.S. Defense Secretary Mark Esper speaks about U.S. strategy in the Indo-Pacific on July 21. Image credit: Axios.

In a speech this morning over Zoom, U.S. Secretary of Defense Mark Esper said that U.S. policy champions a free and open Indo-Pacific, and China has no right to turn free waters into a “zone of exclusion” for its own “maritime empire."

The big picture: Esper's remarks come one week after the U.S. State Department announced it rejects most of China's territorial claims in the South China Sea.

  • The position aligns with the international tribunal ruling in 2016 that dismissed most of China's claims there as having no basis in international law.
  • "We call on China’s leaders to abide by international laws and norms that China and the Chinese people have benefited from," Esper said in the speech to the International Institute for Strategic Studies in London.
4. The Biden case on Trump and China

Photo illustration: Sarah Grillo/Axios. Photo: Bastiaan Slabbers/NurPhoto, and Bastiaan Slabbers/NurPhoto via Getty Images

President Trump has attempted to make his tough-on-China stance a key facet of his campaign (though John Bolton's book has made that a harder sell), writes Axios' Dave Lawler.

Why it matters: Joe Biden, in Trump's telling, wouldn't have the will or capacity to challenge China as he has.

Tony Blinken, a foreign policy adviser to Biden who will likely get a top job if Biden wins in November, laid out a counterargument on Sunday on CNN's "Fareed Zakaria GPS."

  • "We're engaged in a serious competition with China," Blinken said. "Competition can be a good thing, but we want to make it a race to the top, not a race to the bottom, and that's a race we'll win."
  • "But here's the problem. Right now, by virtually every key metric, China's strategic position is stronger and ours is weaker as a result of President Trump's leadership."
  • Blinken cited power vacuums, schisms with allies, a "green light" to commit human rights abuses and the "debasing our own democracy."

His bottom line: The U.S. needs to get its own economic and political house in order, repair its alliances and then "engage with China from a position of strength."

Worth noting: This is a much more nuanced argument than the one Biden himself made last May, before changing gears on China:

  • "[T]hey’re not bad folks, folks. But guess what? They’re not competition for us."
5. Chinese ambassador struggles to explain Xinjiang footage of blindfolded prisoners
Screenshot: "The Andrew Marr Show," BBC.

China's ambassador to the U.K., Liu Xiaoming, struggled on Sunday to explain drone footage from the region of Xinjiang that appears to show prisoners with shaved heads shackled, blindfolded and being led to trains, writes Axios' Fadel Allassan.

Why it matters: The video, which first appeared in October 2019 but resurfaced and went viral recently, has prompted fresh scrutiny of the human rights abuses China is carrying out against Uighur Muslims and other ethnic minorities.

What he's saying: "Sometimes you have a transfer of prisoners," Liu said. “Uighur people enjoy peaceful, harmonious coexistence with other ethnic groups of people."

Watch the video.

6. 1 book thing: The two foreigners who ruled the underworld of 1930s Shanghai

Image credit: Picador

Not quite nonfiction, not quite a novel, Paul French's book "City of Devils" draws on archival research and interviews to reconstruct the lives of a cast of shady foreign characters in the Shanghai international settlement in the 1930s.

  • Shanghai became a foreign concession in the 19th century after Britain defeated China in a succession of wars, but it wasn't a colony and no single country ruled it.
  • "Shanghai between the world wars was a home to those with nowhere else to go and no one else to take them in," French writes in the introduction about Russian refugees, Jews fleeing Europe, criminals on the run and others who could easily enter.
  • "But no city, not even Shanghai, was big enough for all those who sought to profit from it."

I've got a particular fondness for the character of Joe Farren, who grew up in Vienna's traditional Jewish neighborhood in Leopoldstadt, a neighborhood where I too spent a part of my childhood.

  • Farren was the star of Shanghai's dance halls with his partner Nellie Farren, and he eventually helped American outlaw Jack Riley run a gambling and drug ring there.

What he's saying: "The thing that makes Shanghai unique is that it is a product of violence and imperialism," French told me in an interview. "It’s created out of violence and war, but it becomes a sanctuary."

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